Sebastian v Rail Infrastructure Corporation & anor [2002] FCAFC 396 | Case summary

REASONS FOR DECISION Introduction 1 Mr Sebastian made three complaints of disability discrimination (two of which included claims of victimisation) against the State Rail Authority of NSW (SRA) and Rail Infrastructure Corporation (RIC). The complaints were made under the Anti-Discrimination Act 1977 (AD Act) and relate to an application Mr Sebastian made to the SRA for employment as a Customer Service Attendant. Mr Sebastian disclosed that he was "dyslexic" and that he had a disability in relation to "learning/reading". Testing conducted by the SRA revealed that he also has a colour vision deficiency. His application for employment was rejected. A friend of Mr Sebastian's, Ms Beck, lodged three complaints of disability discrimination and victimisation with the President of the Anti-Discrimination Board (ADB) on Mr Sebastian's behalf. The complaints related to the manner in which SRA and RIC had treated Mr Sebastian. 2 The matters were listed for hearing on 14, 15 and 16 December 2004 before the Tribunal constituted by Professor N Rees, Judicial Member, M Gill, Member and L Mooney, Member. Mr Siva, counsel acting pro-bono for Mr Sebastian, appeared on 14 December 2004. The parties agreed to a suggestion from Professor Rees that since Mr Sebastian was now legally represented, the matter should proceed to mediation. Another member of the Tribunal, who is a trained mediator, conducted a mediation between the parties that day. Later that afternoon, Mr Siva and Ms Ronalds SC, acting for SRA and RIC, told Professor Rees at a case conference that the complaints had been settled and that the parties had signed a document headed "Principles of Agreement" (the Agreement). The Agreement provided for the respondents to pay Mr Sebastian a sum of money within 28 days of the execution of a deed. In turn, Mr Sebastian released the respondents from liability in relation to the three complaints. The Agreement also contained other provisions relating to the conduct of each party. 3 The hearing was adjourned to a date to be fixed to allow the parties to finalise the settlement arrangements. Mr Sebastian did not sign the deed as contemplated by the Agreement and, on 8 July 2005, the Tribunal heard an application by RIC and SRA for orders that Mr Sebastian's complaints of disability discrimination and victimisation be dismissed. The basis for that application was that Mr Sebastian had signed a binding agreement to settle those complaints following the mediation session and his failure to sign the deed was inconsequential. In the reasons for decision, at [30] and [31], the Tribunal describes what happened after Mr Sebastian signed the Agreement at mediation: It is not in dispute that shortly after the mediation Ms Sharp, the solicitor for the respondents, prepared a draft Deed of Release and forwarded it to Mr Siva. Thereafter, there was considerable email and telephone contact between Ms Sharp and Mr Siva concerning Ms Sharp's request that the draft deed be executed by Mr Sebastian. On 11 February 2004 Mr Siva informed Ms Sharp by email that "I am no longer retained by Mr Sebastian in this matter" and that "I am no longer able to obtain instructions regarding the deed of release". The Deed of Release has not been executed. Ms Beck subsequently contacted the Tribunal with the request that the State Rail Authority complaint and the first Rail Infrastructure Corporation complaint be re-listed because she no longer regarded them as having been settled. The solicitors for the respondents filed applications that both of these complaints be dismissed. The second Rail Infrastructure Corporation complaint was subsequently referred to the Tribunal by the President of the ADB. The solicitors for the respondents filed an application that this complaint be dismissed. The respondents' applications to dismiss all three complaints were then set down for hearing on 8 July 2005. 4 On that day, Mr Sebastian agreed that he had signed the Agreement at the conclusion of the mediation session on 14 December 2004. However his agent, Ms Beck, submitted that the Agreement had no legal effect because of the manner in which the mediation was conducted, the content and effect of the Agreement and the conduct of RIC and SRA since the Agreement was signed. The Tribunal dismissed each of the three complaints subject to the Tribunal being satisfied that the settlement sum be paid and that a condition of the Agreement to notify Mr Sebastian when a functional assessment becomes available had been satisfied. The functional assessment is a reference to a practical test, or "on the job' assessment, to determine whether a person with some degree of colour blindness can work as a hand signaller. The Tribunal also ordered Mr Sebastian to pay costs of $1,000.00 in each of the three matters. 5 Mr Sebastian has appealed to the Appeal Panel against the Tribunal's decisions. Under s 113(1) of the Administrative Decisions Tribunal Act 1997 (Tribunal Act), an appeal may be made "on any question of law." If the Appeal Panel grants leave, an appeal may extend to a review of the merits of the appealable decision. Under s 113(2A) of the Tribunal Act an appeal against an interlocutory decision cannot proceed without the Appeal Panel's permission. Preliminary issues 6 Three preliminary issues arise. They are: (a) whether the appeal was lodged within time; (b) whether the Tribunal's decision was an interlocutory or final decision; and (c) if it was an interlocutory decision, whether the Appeal Panel should give Mr Sebastian permission to appeal against the Tribunal's decision. Was the appeal lodged within time? 7 Under s 113(3)(b) of the Tribunal Act an appeal must be made "within 28 days after the Tribunal furnishes the party with written reasons for the appealable decision" or "within such further time as the Appeal Panel may allow." The Tribunal's decision is dated 5 December 2005. Ms Beck says she received the decision by post on 8 December 2005. We accept that the Tribunal furnished her with written reasons on that day. The appeal was made on 5 January 2005. The period from 8 December to 5 January is exactly 28 days. Consequently, the appeal was lodged within time. Interlocutory or final decision? 8 The respondents submitted that the Tribunal's decision dismissing the complaints was an interlocutory decision, rather than a final decision. If that is correct, then leave is required before the appeal can proceed: Tribunal Act, s 113(2A). The Tribunal's decision was to dismiss the complaints subject to it being satisfied that a number of conditions had been fulfilled. The power to dismiss a complaint for that reason comes from s 102 of the AD Act which permits the Tribunal to dismiss a complaint "at any stage in proceedings". One ground for such a dismissal is where the Tribunal is "satisfied that for any other reason no further action should be taken in respect of the complaint": AD Act, s 92(1)(b). 9 Whether a judgment is final, as distinct from interlocutory, depends on whether the judgment finally determines the rights of the parties: Licul v Corney (1976) 180 CLR 212 at 225; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248. The Tribunal did not determine whether or not the respondents had breached the Anti-Discrimination Act 1977, it decided to dismiss the complaints on being satisfied of certain matters. In our view, the Tribunal's decision was an interlocutory decision because dismissals under s 102 are summary dismissals not involving an assessment of the merits of the complaints. That conclusion is supported by s 24A of the Tribunal Act which allows the Appeal Panel, when exercising an "interlocutory function", to be constituted by a presidential member sitting alone. That provision does not prevent the Appeal Panel from sitting with three members, as it did in this case. Section 24A defines "interlocutory function" to include "the making of any order or other decision by the Tribunal in proceedings in respect of summary dismissal." (See also Southern Cross Exploration NL v Fire and All Risks Insurance Co Ltd [No 2] (1990) 21 NSWLR 200 and Symonds v Vass & Ors [2003] NSWSC 170.) Should permission be granted to appeal against the Tribunal's decision? 10 The respondents submitted that leave should not be granted for Mr Sebastian to appeal against the Tribunal's decision. The basis for that submission was that Mr Sebastian had not identified any errors of law and the grounds of appeal largely repeated the submissions he had put to the Tribunal at first instance. 11 When applying similar provisions to s 113(2A) of the Tribunal Act, the High Court has pointed out that there are no rigid rules or exhaustive criteria that must be applied when determining whether to grant leave: Adam P Brown Male Fashions Pty Limited v Philip Morris Inc (1981) 148 CLR 170 at 175. Nevertheless, the general rule is that the discretion to grant leave to appeal from an interlocutory decision should only be exercised where there are substantial reasons for doing so: Johnson Tiles Pty Ltd v Esso Australia Co-op Co Ltd [1990] VR 355 at 364. In Décor Corp Pty Ltd v Dart Industries Inc (1991) 104 ALR 621 at 622 the Full Federal Court said, in similar circumstances, that leave should not be granted unless: (a) in all the circumstances the decision is attended with sufficient doubt to warrant its reconsideration on appeal; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong. 12 Where the interlocutory decision concerns the substantive interests of the parties, as opposed to decisions concerning matters of practice and procedure, there is a greater likelihood that an incorrect decision will cause substantial injustice: Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FAFC 270 at [8]. 13 Whether or not the decision is attended with sufficient doubt to warrant its reconsideration on appeal requires an examination of Mr Sebastian's grounds of appeal. Consequently, we cannot have regard to that matter until we have examined those grounds. The question of whether a substantial injustice would result if leave were refused is an easier question to answer at this stage. If leave were refused, then Mr Sebastian would receive his settlement monies in exchange for his promise to release the respondents from liability in relation to the three complaints. While it is not appropriate for the Appeal Panel to disclose the amount of the settlement monies, we agree with the Tribunal's comment that the sum "is a very reasonable settlement figure in a case of this nature." In those circumstances there would be no "substantial injustice" if leave were refused. 14 The final matter of relevance to the question of whether leave should be granted is that the decision affects Mr Sebastian's substantive interests as opposed to matters of practice or procedure. Although we are able to make findings about two of the three factors relevant to the question of leave, the third matter, the prospects of success of the appeal, cannot be determined until we examine Mr Sebastian's grounds of appeal. Consequently, we will postpone making a decision on whether or not to grant leave until we consider those grounds. Tribunal's decision 15 Ms Beck, as agent for Mr Sebastian, submitted to the Tribunal that the Agreement should not be enforced. A summary of Ms Beck's submissions and the Tribunal's reasons for rejecting them are set out below: (1) the process which produced the Agreement was not 'mediation' and consequently the Agreement was unenforceable; Tribunal's response (at [76]): The process which led to the making of the Agreement was mediation. The fact that the parties did not sit in the same room at the same time did not mean that the process was not a mediation under s 101(1) of the Tribunal Act. (2) that the Agreement reached as a result of the 'mediation' amounted only to an agreement in principle, not a binding agreement; Tribunal's response at [77): The agreement was a binding agreement and not merely an agreement in principle as it fell within the second category of agreements identified by the High Court in Masters v Cameron (1954) 91 CLR 353. (3) that Ms Beck was placed under duress when she signed the Agreement; Tribunal's response at [79]: The question of whether or not Ms Beck, as Mr Sebastian's agent, was or was not under duress at the time the Agreement was signed has no bearing on the enforceability of the Agreement. She had no capacity to settle two of the complaints and her capacity to settle the third complaint was shared jointly and severally with Mr Sebastian. (4) the respondents breached the term of the Agreement concerning confidentiality and non-disparagement and the Agreement should therefore be set aside; Tribunal's response [90]: There was no evidence that the respondents had breached the term of the Agreement in the manner suggested by Ms Beck. Even if a breach had been proved, the term in issue was merely a warranty and did not provide the applicant with a right to terminate the Agreement. (5) that the respondents failed to perform one of their obligations under the Agreement in which the respondents promised to "notify the applicant in writing as soon as the functional assessment is available"; Tribunal's response at [92]: There was no evidence to suggest that the respondents had failed to perform their obligations in the manner suggested by Ms Beck and that, even if such failure could be demonstrated, it would not provide the applicant with a right to terminate. Grounds of appeal 16 We summarise the grounds of appeal below: (1) That the Tribunal did not correctly apply the law in Masters v Cameron (1954) 91 CLR 353 to the facts of the case. Ms Beck argued that the Agreement was represented to the applicant as an 'Agreement in Principle' and not as a final contract. (2) That the Tribunal erred in finding that Mr Sebastian had the capacity to enter into an agreement to discontinue the proceedings. His inability to read and understand the terms of the Agreement prevented him from coming to a fully informed decision as to whether the Agreement was in his best interests. (3) That Mr Sebastian was not afforded 'independent and other expert advice' when negotiating the Agreement. The lawyer who was assisting him at the time was not aware of his disability, and the terms of the Agreement were not properly explained to him. The contract is therefore 'unjust' under section 9(2)(h) of the Contracts Review Act 1980 and should be set aside. (4) That the Tribunal erred in describing Ms Beck as Mr Sebastian's agent. She said she did not come within the definition of an agent set out in International Harvester Co of Australia Pty Ltd v Carrigans Hazeldene Pastoral Co (1958) 100 CLR 644, because she was merely a support person, and lacked the authority and capacity to create legal relations between Mr Sebastian and third parties. (5) That even if the contract itself were upheld, various terms of the contract should be declared to be void. Specifically: (a) Clause 5, which states that the applicant "has no intention to apply for a position with StateRail, RailCorp or RIC for a period of two years from the date of execution of the Deed" is an illegal restraint of trade; (b) Clause 6, by which Mr Sebastian "releases and forever discharges the respondents from" certain proceedings and claims is invalid because it ousts the jurisdiction of courts to hold the parties to their bargain: Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 343; (c) Clause 6, to the extent that it requires Mr Sebastian to ignore his statutory duty by failing to refer complaints arising from his employment to the Rail Regulator or any other body capable of reviewing decisions of State Rail or RIC is void for illegality. (6) That the Tribunal erred by not providing adequate reasons for its decision; (7) That the Tribunal denied Mr Sebastian procedural fairness in relation to its decision on costs; and (8) That the Tribunal erred by making findings for which there was no evidence. Ground 1 - misapplication of the decision in Masters v Cameron 17 The Tribunal rejected Ms Beck's submission that the Agreement was not binding by applying the High Court's decision in Masters v Cameron (1954) 91 CLR 353. The Tribunal said at [77] that: The second argument advanced by Ms Beck was that no binding agreement was reached on 14 December 2004 because the document headed 'Principles of Agreement' was an agreement in principle rather than a binding agreement. There is no merit to this argument. We accept the submission by Ms Ronalds SC that the settlement agreement in this case was an agreement within the second class of agreements described by the High Court in Masters v Cameron (1954) 91 CLR 353 at 360. This was "a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal contract". In these circumstances "there is a binding contract" ((1954) 91 CLR 353 at 360). 18 Ms Beck submitted that the Agreement came within the third class of agreements described by the High Court in Masters v Cameron, and not the second class of agreements. The High Court identified three categories of cases where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the subject matter of their negotiation shall be dealt with by a formal contract. The first two categories result in a binding agreement, the third category does not. The three categories identified by the High Court were: (1) A case in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect; (2) A case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. (3) A case in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. 19 An example of a contract which came within the first category arose in Owners Corporation Strata Plan 62285 & Ors v Betona Corporation (NSW) Pty Ltd & Ors [2006] NSWSC 216. In that case Gzell J held that following a conciliation conference where finality had been reached in relation to all the terms of the bargain, the parties became bound by the terms of that bargain. 20 Ms Beck submitted that the Agreement came within the third category because the terms of the Agreement were not intended to have, and therefore did not have, any binding effect. Despite the parties having settled on the terms of their bargain, Ms Beck says that she believed that Mr Sebastian had a right to withdraw from the bargain at any time prior to the execution of the deed of release. 21 We agree with the Tribunal's conclusion that the circumstances of this case fall squarely within the second category of cases identified by the High Court in Masters v Cameron. The parties signed an agreement setting out all the terms of their bargain, but made the payment of the settlement monies conditional on the execution of a deed. This is not a case of mere agreement in principle to compromise the matter. (Cf Locnere Pty Ltd v Jakk's Bagel & Bread Co Pty Ltd [2003] NSWSC 1123.) Ground 2 -lack of capacity to enter into agreement 22 The second ground of appeal was that the Tribunal erred in finding that Mr Sebastian had the capacity to enter into an agreement to compromise the proceedings. According to Ms Beck, Mr Sebastian's inability to read and understand the terms of the Agreement prevented him from coming to a fully informed decision as to whether the Agreement was in his best interests. The Tribunal said at [78], that: There is no suggestion that Mr Sebastian did not have the capacity to enter into an agreement to discontinue his litigation in exchange for the payment of a sum of money ... Mr Sebastian was legally represented at the time he signed this agreement on 14 December 2004. The email communication between Ms Sharp and Mr Siva indicates that Mr Siva considered himself to be representing Mr Sebastian until 11 February 2005 when he informed Ms Sharp that he was no longer retained. Mr Sebastian entered into a binding agreement to settle these complaints on 14 December 2004. 23 Towards the end of the hearing before the Tribunal, Professor Rees put forward the point of view that Mr Sebastian could bind himself in relation to the Agreement and there was no need for Ms Beck to sign the Agreement on his behalf. Ms Beck's response to that point was that Mr Sebastian was under a "special disability". She went on to make some allegations about what took place in the mediation. Professor Rees rightly pointed out that evidence of any thing said in a mediation session is not admissible: Tribunal Act, s 107(4). 24 In Gibbons v Wright (1954) 91 CLR 423 the High Court held that parties entering into contractual relations ought to have "such soundness of mind as to be capable of understanding the general nature of what [they] are doing by [their] participation" (at 437) and "the capacity to understand that transaction when it is explained" (at 438). There was no evidence before the Tribunal that would support a finding that Mr Sebastian lacked such capacity. We can detect no error of law in the Tribunal's finding on this point. Ground 3 - lack of independent advice 25 The third ground of appeal is related to the second ground. Ms Beck says that Mr Sebastian was not afforded 'independent and other expert advice' when negotiating the Agreement. She claims that Mr Siva, the lawyer representing Mr Sebastian at the time, was not aware of his disability and the terms of the Agreement were not properly explained to him. The contract is therefore 'unjust' under section 9(2)(h) of the Contracts Review Act 1980 (NSW) and should be set aside. The relevant provisions of the Contracts Review Act are set out below: (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: ... (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, 26 There are several reasons why Ms Beck's submission fails to establish an error of law on the part of the Tribunal. First, the definition of a "court" in s 4 of the Contracts Review Act does not include the Tribunal and therefore the provisions of that Act do not apply. Secondly, even if s 9 did apply to the Tribunal, the question of whether or not a party had independent legal advice is a matter to which the decision-maker must "have regard" when determining whether a contract is unjust. A contract will not necessarily be found to be unjust merely because a person did not have independent legal advice. Finally, in this case, Mr Sebastian did have independent legal advice. Ground 4 - Ms Beck not Mr Sebastian's agent 27 The next ground of appeal was that the Tribunal erred in describing Ms Beck as Mr Sebastian's agent. She said she did not come within the definition of an agent set out in International Harvester Co of Australia Pty Ltd v Carrigans Hazeldene Pastoral Co (1958) 100 CLR 644, because she was merely a support person, and lacked the authority and capacity to create legal relations between a person occupying the position of principal (Mr Sebastian) and third parties (the respondents). Furthermore, Ms Beck says that the words "acting on behalf of Joseph Sebastian" which appeared on the Agreement adjacent to her signature, were not written by her but added after she signed the Agreement. 28 A party to proceedings before the Tribunal may appear without representation or be represented by an agent: Tribunal Act, s 71(1). The agent may or may not be a person with legal qualifications. When the mediation took place, Mr Sebastian was represented by a lawyer, Mr Siva. Ms Beck was not acting as his agent at that stage. Mr Sebastian signed the Agreement himself. Ms Beck did not need to sign it, either as his agent or in any other capacity. In those circumstances, it does not matter whether or not Ms Beck had the capacity to sign the Agreement on behalf of Mr Sebastian or whether she or someone else wrote the words "acting on behalf of Joseph Sebastian" on the Agreement. Ground 5 - some of the terms of the contract were void for illegality 29 The next ground of appeal is that some of the terms of the contract should be declared to be void. Specifically: (1) Clause 5, which states that "The parties note that the Applicant has no intention to apply for a position with StateRail, RailCorp or RIC for a period of two years from the date of execution of the Deed" is an illegal restraint of trade and in breach of Mr Sebastian's contract with Centrelink. (2) Clause 6, which states that "The Applicant releases and forever discharges the respondents from: (a) ADB proceedings No 2004/0791 (b) ADT proceedings No 041080 (c) ADT proceedings No 041071 (d) any claims demands or proceedings in relation to any matter relating directly or indirectly in relation to all matters facts and circumstances described in subsection (a), (b) and (c) above including any complaint to the Rail Regulator or any related entity." is invalid and/or void because it ousts the jurisdiction of courts to hold the parties to their bargain ( Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 343) and because it requires Mr Sebastian to ignore his statutory duty to refer complaints arising from his employment to the Rail Regulator or any other body capable of reviewing decisions of State Rail or RIC. 30 Ms Beck says that Clause 5 amounts to an illegal restraint of trade. There is no need to consider the merit of that argument because Mr Sebastian has not promised to refrain from applying for a position with the respondents. The parties have merely noted that he does not intend to do so for a period of two years. Ms Beck also said that by agreeing not to apply for jobs with the respondents, Mr Sebastian has breached his contract with Centrelink because to be eligible for Centrelink benefits, he has to prove that he is attempting to obtain full time employment. According to Ms Beck, the respondents are the only employers who have positions suited to Mr Sebastian's qualifications. Again, this clause merely notes Mr Sebastian's intention and has no effect on the legality or enforceability of the Agreement. 31 Clause 6 is a standard release clause relating to matters contained in the three proceedings to which Mr Sebastian and one or more of the respondents were a party. That clause does not prevent Mr Sebastian from complaining to the Rail Regulator or any other similar entity about matters outside the terms of the clause. Nor did Ms Beck point to any statutory duty to make a complaint which would conflict with this clause. Ground 6 - inadequate reasons 32 Related to ground 5, is a further ground of appeal that the Tribunal's decision was incomplete and did not deal with all Ms Beck's submissions. In particular, she says that the Tribunal did not mention clauses 5 and 6 of the Agreement in its decision, despite the fact that she raised issues about those clauses in her written submissions. Ms Beck also referred to these issues briefly in her oral submissions to the Tribunal. 33 While the Tribunal did not refer specifically to Ms Beck's submissions about those clauses, it is apparent from its reasoning and conclusion that it did not accept those submissions. At [84] to [93], the Tribunal dealt with a submission that the Agreement should be set aside because the respondents breached a clause in the Agreement relating to confidentiality and non-disparagement. The Tribunal then made a general finding at [93] that, "There is no merit to any of the challenges to the enforceability of the agreement reached on 14 December 2004." In our view, the Tribunal's conclusion suggests that it was aware of all Ms Beck's submissions about the enforceability of the Agreement but found them so unconvincing that there was no need to deal with each of them in detail. To find otherwise would be to risk breaching the well-known principle that reasons are "not to be construed minutely and finely with an eye keenly attuned to the perception of error": Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287. Ground 7 - denial of natural justice in relation to application for costs 34 Ms Beck submitted that she was not given an adequate opportunity to respond to the respondents' application for costs. Mr Sebastian was on notice of that application prior to the hearing because it was made in the respondents' written submissions. At the conclusion of the hearing, Professor Rees asked Ms Ronalds SC, representing the respondents, whether she wanted to say any more about the costs application. Ms Ronalds SC made a short oral submission in support of her application. Professor Rees then asked Ms Beck if she wanted to say anything about the costs application. Ms Beck made some oral submissions. In those circumstances we are satisfied that Ms Beck knew of the application for costs and had an adequate opportunity to respond to it. The Tribunal did not deny her procedural fairness. Ground 8 - findings for which there was 'no evidence' 35 Ms Beck submitted that the Tribunal had made findings of fact where there was no evidence to support those findings, particularly in relation to identifying the conditions in the contract. Ms Beck also objected to the Tribunal's finding that at [103] that: She has caused a matter which was settled at a time when Mr Sebastian was legally represented to be litigated at substantial expense to the respondents and to the public purse. 36 Ms Beck also submitted that the Tribunal had made a finding with no evidence when it found that she was acting as Mr Sebastian's agent. The evidence as to whether clauses of the Agreement were conditions of the contract or not can be found in the Agreement itself which was before the Tribunal. Evidence of Ms Beck's conduct in pursuing litigation which had settled was clear from the evidence and from the fact that Ms Beck acted as Mr Sebastian's agent in defending the respondent's application under s 102 for the proceedings to be dismissed. Finally, despite Ms Beck's protestations to the contrary, she was acting as Mr Sebastian's agent in the proceedings on 8 July 2005. As we have said, a party to proceedings before the Tribunal may appear without representation or be represented by an agent: Tribunal Act, s 71(1). The agent may or may not be a person with legal qualifications. Since Ms Beck was not a party, the only capacity in which she could advocate on his behalf was as his agent under s 71. Further submissions 37 A further submission made by Ms Beck can be dealt with shortly because it does not amount to a ground of appeal. Ms Beck submitted that it was unreasonable for the Tribunal to assume that Mr Sebastian would discontinue his complaints on being paid a sum of money. She said that the amount of money he was to receive under the settlement does not even cover his wages for the previous six months. According to Ms Beck, Mr Sebastian had been complaining for three years about the fact that there was no practical colour vision test. When that test was developed she said that the respondents had not given him the opportunity to do the test. The likelihood that Mr Sebastian would have agreed to compromise his complaints is not relevant either to the Tribunal's determination or to this appeal. Should leave be granted? 38 Each of the factors we identified at [11] and [12] as being relevant to the issue of whether leave should be granted can now be addressed. Our examination of the grounds of the appeal do not persuade us that the Tribunal's decision is attended with sufficient doubt to warrant its reconsideration. We have already found that substantial injustice would not result if leave were refused, even if the Tribunal's decision is wrong. In view of those findings, the fact that the Tribunal's decision concerns Mr Sebastian's substantive interests, as opposed to matters of practice and procedure, is not sufficient to satisfy us that leave should be granted. Leave to appeal is refused. Costs of these proceedings 39 The respondents applied for costs and submitted that Mr Sebastian and his agent, Ms Beck, should share those costs equally between them. The respondents said that a costs order was justified for the same reasons as the Tribunal awarded costs at first instance. The Tribunal's reasons for awarding costs were given [98] to [106]. At [100], the Tribunal said: In this case Mr Sebastian has been hampered by the fact that he was represented by an agent, Ms Beck, who is not legally qualified. Mr Sebastian was legally represented at the time he agreed to settle his complaints. It is apparent from the emails attached to Ms Sharp's first affidavit that Mr Siva ceased to act for Mr Sebastian because his instructions were withdrawn. It is also apparent that Ms Beck clearly advised Mr Sebastian about the course of action which he should follow after the 'Principles of Agreement' had been signed. That advice was not sound. In responding to the applications by the respondents that the complaints be dismissed Ms Beck sought to present arguments which were legally complex and misconceived. 40 In response to the respondents' application for costs, Ms Beck submitted that questions of law were put before the Tribunal in the appeal, and that the appeal is valid. Alternatively, she argues that Mr Sebastian has no money to pay costs. 41 There is conflicting authority at the Appeal Panel level as to whether s 88 of the Tribunal Act or s 110 of the AD Act is the correct provision to apply when considering an application for costs on appeal from a decision of the Equal Opportunity Division of the Tribunal. In Cargill Australia Limited v Higginson (No 2) NSWADTAP 33 at [11] the Appeal Panel held that the correct provision to be applied was s 88(1), while in Y v V & X [2003] NSWADTAP 44 at [45], the Appeal Panel held that the predecessor to s 110 of the AD Act (s 114) was the applicable provision. We accept that because the Appeal Panel is part of the Tribunal as a whole, the same costs provision applies on appeal as applied at first instance: Tu v University of Sydney (No. 2) (EOD) [2002] NSWADTAP 25 at [60]. Consequently, s 110 of the AD Act is the relevant costs provision. That provision states that "each party is to pay his or her own costs" except as provided by s 110(2). Section 110(2) states that: "[where the] Tribunal is of the opinion in a particular case that there are circumstances that justify it doing so, it may make such order as to costs and security for costs, whether by way of interim order or otherwise, as it thinks fit". 42 The first question is whether a costs order should be made against the appellant, Mr Sebastian. In Y v V & X (EOD) [2003] NSWADTAP 44 at the Appeal Panel discussed the applicable principles. Practice Note 12 advises parties of the law and the usual practice of the Tribunal in relation to costs. In summary, the principles relevant in relation to an application of costs in the proceedings are as follows: (1) Section 110 creates a presumption that each party will pay his or her own costs and a discretion to award costs: Cleary Bros (Bombo) Pty Ltd -v- Cvetkovski (EOD) [2001] NSWADTAP 10 at paras 63-65; (2) This discretion must be exercised judicially, and no authority or rule can determine whether in any particular case an order should be made; (3) previous cases relating to costs can only provide an indication of the kinds of circumstances that may attract a costs order; (4) as a general proposition, a combination of circumstances is required in order to justify an award of costs. See, for example, Russell v The Commissioner of Police, NSW Police Service and Others [2002] (No.2) NSWADT 252; Peck v Commissioner of Corrective Services (No. 2) [2002] NSWADT 244; V v Y & Anor; X v Y & Anor [2002] NSWADT 7; Duggan v Shore Inn Pty Limited (1993) EOC 92-483; Willis v State Rail Authority of New South Wales (No. 3) (1992) EOC 92-456; Holdaway v Qantas Airways Limited (1992) EOC 92-430; Squires v Qantas Airways Ltd (1985) EOC 92-135. In combination with other factors, the kinds of circumstances which have been regarded in previous cases as justifying an award of costs against an applicant include: (i) the manner in which the applicant has conducted the proceedings, in particular whether the proceedings were vexatious; (ii) whether the proceedings determine or clarify an important question of law; (iii) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding; and (iv) where an appeal is lodged and the Appeal Panel considers the appeal was without any real prospect of success. 43 The only relevant factor in this case is that the appeal was conducted without any real prospect of success. There was no suggestion that the appeal was vexatious or that Mr Sebastian's conduct unreasonably prolonged the time taken to complete the proceedings. Mr Sebastian was not legally represented. Consequently his knowledge of the prospects of success of the appeal would have been negligible. In our view, the circumstances in which this appeal was brought and prosecuted do not justify an award of costs against Mr Sebastian. The ability or otherwise of a person to meet an order for costs is not a relevant consideration when determining whether costs should be awarded. 44 Mr Sebastian may be curious as to why the Tribunal's order for costs against him stands, when the Appeal Panel has refused the respondents' application for costs in these proceedings. The reason is that Mr Sebastian did not identify any error of law in relation to the Tribunal's decision as to costs. 45 The respondents also applied for an award of costs against Ms Beck personally. Although the Tribunal did not award costs against Ms Beck at first instance, it made the comment, at [103] that, "Section 110(2) is of sufficient breadth to support a costs order against an agent or legal representative of a party so long as that person is given notice of the fact that a costs order has been sought against them and an opportunity to respond." This proposition is not free from doubt given the differences in wording between s 88 of the Tribunal Act and s 110 of the AD Act. However, even if s 110 does allow the Tribunal to order costs against a non-party, we have decided not to exercise our discretion to do so in this case. Consequently, we do not need to decide conclusively whether or not there is such a power in s 110 of the AD Act. 46 While the principles applicable to the awarding of costs against lawyers are relatively clear, it is far less common for courts or Tribunals to consider awarding costs against lay agents. The rule in most courts is that an agent may only appear by leave. Courts are reluctant to grant leave and even more reluctant, it seems, to order costs against lay agents. That approach is reflected in a comment of Stein AJ (with whom Mason P and Sheller JA agreed) in Damjanovic v Maley (2002) 55 NSWLR 149. His Honour recognised that "in appropriate cases a legal practitioner may be ordered to pay costs" but conceded that "the position is far less clear in relation to a non party lay advocate. There are extreme circumstances where the conduct of a lay advocate could attract an adverse order" (at [75]). 47 In Applicant NAGM of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 396 the Full Federal Court said that three things should be borne in mind when determining whether to award costs against a lay advocate. First, the object is to reimburse to a party costs which that party has incurred by reason of the conduct of the non-party. The jurisdiction is not punitive or disciplinary. Secondly, an order for the payment of costs by a non-party is exceptional and any application for such an order should be treated with considerable caution. Caution is especially called for when the non-party is providing voluntary assistance to a litigant who is not legally represented and who is unfamiliar with the legal system. Thirdly, the mere fact that the non-party has been actively involved in preparing and presenting a hopeless case will not ordinarily justify a costs order against that person. 48 These principles were applied by Lander J in Williams v Minister for Environment & Heritage 132 LGERA 368; [2004] FCAFC 58. In that case Mr Oshlack had acted as a lay advocate for Mr Williams. Mr Oshlack was from the Indigenous Justice Advisory Network, a non-profit organisation dedicated to providing legal services, advocacy, consultation and advice to Aboriginal traditional owners and elders. The Court found that although the appeal lacked utility, Mr Oshlack did not appreciate that fact (at [33]). The Court also noted that Mr Oshlack had not been an "officious intermeddler" in the case, but had actually "assisted the Court in the resolution of the appeal" (at [38]). Mr Williams' appeal was unsuccessful and the Court ordered him to pay costs, but did not make an order against Mr Oshlack personally. 49 The conduct of the lay advocate in Williams may be contrasted with that of a lay associate in Curtin v Vice-Chancellor, University of New South Wales [2006] NSWADT. In that case, the Tribunal awarded costs against the applicant and his associate due to the latter's abusive behaviour at a case conference. The case conference was terminated and the parties had to attend the Tribunal again at a later date. This conduct was held by the Tribunal at [31] to amount to "special circumstances" justifying an award of costs against a non-party pursuant to s 88 of the Tribunal Act. 50 We agree with the Tribunal's comment at [100] that Mr Sebastian "has been hampered by the fact that he was represented by an agent, Ms Beck, who is not legally qualified". We also agree with the Tribunal's view that Ms Beck advised Mr Sebastian about the course of action which he should follow after the Agreement had been signed and that that advice was not sound. Ms Beck was notified of the application for costs against her personally and given an opportunity to respond. 51 Ms Beck has assisted in preparing and presenting a hopeless appeal. That, in itself, does not justify a costs order. We do not have any evidence of Ms Beck's relationship with Mr Sebastian or the source of her interest in his complaints. In those circumstances, we do not regard her as an "officious intermeddler" in these proceedings. Whilst it is clear Ms Beck's legal arguments were ill conceived and lacking in merit, and while she has refused to regard Mr Sebastian as bound by the Agreement he signed, we have no evidence that her motivation was anything but to secure the best outcome possible for Mr Sebastian. The jurisdiction is not punitive or disciplinary. We are not inclined to characterise her conduct as giving rise to exceptional circumstances that would justify an award of costs against her personally. Orders 1. Leave to appeal against the Tribunal's decision is refused. 2. The respondents' application for costs is refused.

Sebastian v Rail Infrastructure Corporation & anor

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